Contents
Image: Getty According to new consumer research from market research agency MMR, consumers are increasingly seeking out new and novel experiences, which means that brands are under pressure to innovate or get left behind.
The UK-based research firm used ‘chatbot technology’ to converse with over 2,500 people across the UK, US, China, South Africa, and Brazil and its findings revealed a “new generation of drivers of product trial,” which range from ‘monotony breaking’ to FOMO-fuelled ‘thrill-seeking’ and an assumption that new products are ‘presumed better’.
Reclaim your innovation space
In a recent webinar about this topic, MMR’s Chief Ideas Officer, Andrew Wardlaw, referred to data from Bain & Co. that showed that in 2023, price increases had accounted for 95% of revenue sales value growth in the UK and the US.
He also mentioned data from Nielsen IQ, which found that 80% of UK CPG categories went into volume reverse last year.
“Between 2021 and 2023 CPG dollar sales increased by 13% while volume sales fell 6%,” he said.
“So, the world over, people are obviously buying less and getting used to buying less,” he continued.
Wardlaw said that in response, “manufacturers will need to activate a more impulsive dynamic to support their innovation strategies.”
He also referred to data from Kantar, which showed that 43% of sales growth for the top 10 manufacturers came from new products
However, he added that data from Circana showed that innovation rates were down by 16.5% in 2023 alone. “They say that overall, 75% of products that are new to the market are coming from SMEs,” he said.
Based on all of this, Wardlaw said that “now might be the time for major players to reclaim innovation spaces.”
“But what’s really the case for product development in 2022 based on the evidence that I’ve seen, I think it’s got to be about meeting people’s appetite and growing appetite for new experiences,” he continued.
“That is, products that help consumers discover something new,” he continued, adding that Circana has also reported that 50% of CPG categories no longer reflect that the way that people actually shop.
He also said that as many as one in four shoppers are now ‘early adopters’, so the case for new product development is very strong.
“All that being said, any moves by manufacturers need to be supported by retailers to the end, absolutely,” he said.
Consumers want “twists on the ordinary”
In the webinar, guest speaker, Nick Graham, who has spent over a decade in insights and analytics with multinational FMCG companies such as PepsiCo and Mondelez, pointed out that “across all generations, we’ve seen a general uptick in the search for experiences.”
Consumers are no longer satisfied with the same old routine,” said Graham. “They want small bursts of excitement, twists on the ordinary that give them a break from the everyday grind. It’s less about novelty for the sake of being different and more about creating moments that stand out.”
He also said that product experience has been under-rated and stated that “The deep lasting connection that people have with brands comes from experiencing them and from the moments of use.”
The world’s greatest discovery brands
MMR has introduced a new ‘self-drive’ tech platform for product testing, Product Hub, which has revealed which brands are best placed to “ride the discovery era”.
The results of ‘The World’s Greatest Discovery Brands’ revealed that McDonald’s, Starbucks, and Cadbury’s are performing well in terms of their ability to introduce consumers to new products and experiences.
Coca-Cola’s limited-time product launches also emerged as a prime example of how to drive innovation effectively.
In the UK market, Heinz was ranked fifth by consumers, who will have seen the company’s innovative collaborations, for example, with Absolut Vodka).
Head of Product Hub, Dan Jenkins, said that these brands “are breaking through the clutter by tapping into what consumers truly want: products that offer excitement, adventure, and something just a little different.”
Product experience should be “number one driver”
Wardlaw, built upon Nick Graham’s comments, highlighting the role of product experience in shaping brand success.
“It’s getting harder for brands to nurture valuable equities via brand communications. Manufacturers should view product experience as their number one driver of brand saliency and equity,” he said.
“In my view, every product experience must enhance user perception of key equities via carefully crafted sensory characteristics.”
Going forward, the firm said that in era where consumer preferences are shaped by TikTok, chatbots, and social listening, CPG giants must rethink their innovation strategies.
“To win in the discovery-led world, brands need to invest in both incremental and disruptive innovations, balancing the familiar with the unexpected,” stated the firm.
Graham also had a clear message for brands hoping to thrive in an increasingly discovery-driven world. “Innovation can’t be an afterthought anymore. You can’t keep offering the same products year after year and expect consumers to stay excited. They’re on a journey, and if your brand doesn’t keep up with them, they’ll move on to something else.”
“In the end, product experience is everything. The journey doesn’t end with a purchase: it’s just the beginning,” he concluded.